Irish accountants body issues warning on Bitcoin

ACCA (the Association of Chartered Certified Accountants) has warned professional accountants to keep up-to-date with developments around cryptocurrencies like Bitcoin.

ACCA has called upon its Irish and global membership to take a leadership role in providing technical and ethical oversight of cryptocurrencies.

Maggie McGhee, Director of Professional Insights at ACCA, said: "Bitcoin has at least three dimensions that are causes for concern. Firstly, its pseudonymous nature means that while one may identify the address a given payment goes to, it is not possible to confirm the identity of the underlying beneficiary.

"This is an obvious risk for Money Laundering, Terrorist Financing and the funding of other types of illegal activities. Secondly, its high volatility makes it inherently risky and unstable. Thirdly, it is funding a speculative bubble in other areas like Initial Coin Offerings (ICOs) with speculators chasing poorly formed business propositions.

"It is important, however, to avoid blaming the house for the fault of the people living in it. The underlying blockchain (distributed ledger) technology behind Bitcoin could revolutionise how financial transactions are done and have a positive impact on business globally. This potential must be viewed separately from the risks of Bitcoin."

Aidan Clifford, Technical Director at ACCA Ireland said Ireland is particularly at risk to cryptocurrencies with regard to money laundering across the border.

He said: "Hard-fought controls over banking, accounting, auctioneering, solicitors and dealers in high-value goods has made laundering the proceeds of crime very difficult in Ireland and this has directly resulted in crime detection and prevention.

“Cryptocurrency could bypass all the current controls and with the pending challenges of Brexit, it could set crime detection back 20 years.

"As an important line of defence it is incumbent upon all accountants to be informed and knowledgeable about the evolution of these evolving assets.”

Exports of goods across the Irish Sea have increased again despite the dampening effects of the slump in sterling since the Brexit vote which ought to have weighed on sales into the UK for firms based in the Republic.